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HONG KONG (Reuters) - Step by step, Chinese authorities are making life tougher for officials looking to spirit assets and family members out of the country to avoid close scrutiny and strict currency controls.

As part of President Xi Jinping's crackdown on pervasive corruption, China's so-called "naked officials", those who have moved their spouses, children and assets overseas while they remain at home, will not be considered for promotion, state media reported.

Also, China's anti-graft body has asked newly promoted officials to disclose their assets and any foreign residency, while late last month, some 2,000 village chiefs in Guangzhou had to hand over their passports to stop corrupt officials from fleeing, Hong Kong's South China Morning Post reported.

Many officials have been taking advantage of a Hong Kong investment scheme to squirrel away more than $1 million each, which includes buying 'residency' in faraway African nations, since the scheme is not open to mainland Chinese residents.

A record number of mainland Chinese have gained permanent residency in places such as Gambia and Guinea-Bissau for themselves and their families, although most will never visit these countries and often choose to live elsewhere.

In downtown Hong Kong, Asia's financial centre, agents openly tout for wealthy mainland Chinese to join the scheme - at a fee of around HK$200,000 ($25,800) - that requires them each to invest HK$10 million ($1.29 million).

Launched by the Hong Kong government over a decade ago to stimulate an economy battered by the Severe Acute Respiratory Syndrome (SARS) crisis, the Hong Kong Capital Investment Entrant Scheme has proved a hit with mainland Chinese who, though technically barred, see it as a means to invest money near home without the tight controls imposed by Beijing. Although governed by Beijing, Hong Kong has a high degree of autonomy.

The investors see it as an eventual way to procure Hong Kong residency and the perks that go with it: lower taxes, better welfare benefits and less government scrutiny of personal assets.

The scheme, which some agents say offers a 5 percent annual interest rate, welcomes investment from foreign nationals, including those from Taiwan and Macau, but specifically bars nationals of Afghanistan, Cuba, North Korea and mainland China.

According to the latest annual Hurun Report, close to two thirds of China's millionaires have emigrated or plan to do so. Of those, however, only 15 percent are looking to give up their Chinese nationality. Most just want permanent overseas residency.

MOVING ASSETS OFFSHORE

The estimated number of mainland officials and their family members shifting assets offshore varies among academics, with some putting it at more than 1 million in the past five years. One Hong Kong-based immigration agency said about a third of the 500 applicants it processed last year were mainland Chinese officials or legislators.

"A huge number of Chinese officials have moved family members and assets offshore, but continue to work for the Chinese government," said Guobin Zhu, a law professor at City University of Hong Kong. "Hong Kong's investment scheme is a means for Chinese officials to move assets overseas."

"Beijing can't tolerate this phenomenon any more. They must feel a sense of crisis."

China's Foreign Ministry spokesman Hong Lei said he was unaware of the details of the issue, but noted: "You will have noticed that recently we have issued a whole series of anti-corruption measures. I'm certain these will be effective."

In Hong Kong, a female agent carries a billboard reading "Invest and immigrate to Hong Kong" and hands out flyers telling applicants they don't have to declare the source of their assets - a key selling point to those seeking to skirt capital controls and hide assets from prying state eyes.

Applicants for the scheme more than doubled to a record 3,380 in the third quarter of 2013 from a year earlier, official data show. There are now more than 17,000 mainland Chinese investors with foreign residency in the programme, accounting for 87 percent of all investors, according to Reuters' calculations based on Immigration Department data.

Agents say part of their fee goes towards buying would-be investors residency in countries such as Gambia and Guinea-Bissau. Investors claiming to be resident in those two African nations made up 13,300 of the total - most of whom will never have stepped foot on their new-found domicile.

"Immigration to Hong Kong is way easier than to many other countries," said a 45-year-old applicant from Shenzhen who gave his last name as Liu. He acquired Gambia permanent residency along with his wife and child in 2011. "It only takes 6 months to get my Hong Kong identity card, and I will apply for a Hong Kong passport after the (7-year) time limit," he said.

Officials at the Immigration Department in Gambia were not willing to talk about the issue.

FAST-TRACK TO HONG KONG

Hong Kong-based Weng Li International Immigration Consultants Ltd says on its website that applicants don't need to declare the source of their assets and can "retain their China household registration status" - which means their mainland business interests and identity remain unaffected.

"It's so easy," said an agent at immigration service firm Worldway Group's office in the southern Chinese city of Guangzhou. "You simply buy residency in these African countries," she added, asking not to be named due to the sensitive nature of the issue.

All it takes for an entire family to gain residency in Guinea-Bissau is a copy of a Chinese passport, birth and marriage certificates, a clean criminal record, 12 passport photos and 15 working days, according to Worldway.

Immigration agents said there were several ways to bypass China's capital control limit - individuals can't exchange more than the equivalent of $50,000 a year in foreign currency - and shift money into Hong Kong: through underground banking networks, by hiring people to open multiple bank accounts in Hong Kong, or simply by moving cash across the border, often strapped to the traveller's body.

Some agents said mainland officials will always find a way to dodge China's passport controls.

"Many of them have two identities - one as a government official and one as a civilian," said one Hong Kong-based immigration agent, who didn't want to be identified.

Hong Kong's Security Bureau, a law enforcement body, said it was aware of the large number of Chinese buying permanent residency from Gambia and Guinea-Bissau to qualify for the scheme, which, it said, it was reviewing.